Split Economies: The Future of Work and Employment
The Atlantic ran two grim and pessimistic articles this week on the future of work and employment. Derek Thompson takes a long look at whether we are at the start of a world without work. Joe Pinsker examines the problems of a four day and thirty two hour work week.
Thompson hits the usual suspects as ending work. He writes about former industrial areas like Youngstown, Ohio which never really recovered from having their industries shutdown. These are usually towns that were dominated by one industry and often one employer. There are dozens of factory towns like this. San Bernardino is currently going bankrupt and no one seems to be winning in this drama. The other usual suspect is technological advancement and automation. Thompson writes ” In 1964, the nation’s most valuable company, AT&T, was worth $267 billion in today’s dollars and employed 758,611 people. Today’s telecommunications giant, Google, is worth $370 billion but has only about 55,000 employees—less than a tenth the size of AT&T’s workforce in its heyday.”
This raises the question about what happens to the other 700,000 plus people. Thompson notes that economists often mention that new technologies might create better jobs but he dourly notes that most American workers still have jobs that existed a century ago. Only around 5 percent of the American labor force is in jobs created by new technologies. There might be jobs but those could be decades away and you need to do something with most people in the meantime. Thompson notes that many college graduates still face underemployment and most of these “non-college” jobs are in low-wage service positions. Thompson cautions about the distorting effect of the Great Recession but still believes “In the biggest picture, the job market appears to be requiring more and more preparation for a lower and lower starting wage.”
Pinsker writes that the 32-hour workweek is largely a fantasy because many workers might want the extra hours and pay and it seems more suited as a quirky perk for hot new start-ups that only employee a marginal number of people. He notes that a lot of big industries like law and finance might have trouble reducing hours based on pay-structure and culture. Goldman Sachs recently just banned interns from being in the office from midnight to seven A.M. Interns were also mandated to take Saturdays off. The other issue is that there are a lot of workaholic managers who don’t know how to measure performance in anyway besides time spent at the office. We will need to find a way to measure dedication and performance besides hours at desk and force it strictly to get hours down.
I am not fond of science-fiction dystopia predictions of the future but Thompson and Pinsker’s articles predict two-economic roads. You will have one set of workers with long-hours and high-pay. The other set of workers will struggle and hustle to get full-time employment (defined at 35-40 hours a week). Thompson writes that Youngstown has reverted into a kind of 19th century barter economy. Someone fixes your car and you give them vegetables from your garden, etc.
My own observations of my friends and classmates and people around me bear this out. I know people who are constantly working and always swamped and then seemingly a lot of very well-educated and potentially productive but working as postmate couriers and cobbling together employment that provides them with rent and expenses but not with career-growth. Why can’t employers hire two people to work 35-40 hours a week instead of hiring one person to work 70-80 hours a week?
I suspect that a lot of people dread the possibility of unemployment and its associated miseries and would rather work long and grueling hours than have more leisure time. There are also space issues. Employers still seem very apprehensive about letting most workers do stuff remotely except IT workers and some other assorted positions. This would require offices to offer more than one switch to save on office space costs and then there will be fights about who works 9-5 and who works 5-1. Do employers even have a need for someone to work from 5 PM to 1 AM? I imagine for many employers, the answer is no.
The opposite end of an economy like Youngstown is a place like San Francisco where one sector is doing much, much better than everyone else. The tech economy is booming and this creates a lot of jobs in other sectors but not necessarily at a wage that makes San Francisco affordable. A friend of mine works in administration and development in a major research institution. The job pays well but not well enough to live in SF. Many of her colleagues have three or four hour commutes. This is a job that cannot be done remotely but it seems soul-crushingly horrible that a decent paying job still requires hours of commuting. Commuting is one thing that makes people very miserable especially when stuck in traffic.
All of the negative predictions by Thompson and Pinsker might prove to be incorrect. There could be a lot of people just making it by now who eventually find their way and turn their stresses and agonies into “when I was your age” stories. Or these could be the shape of things to come. I think there is enough evidence on the ground to suggest that we should be talking about these issues seriously. The problem is that there just might not be any good solutions.